Auckland Council spends $1.2m defending new hotel rates

Saturday, 27 July 2019

Auckland Council has spent $1.2 million in court defending one of the first initiatives by the mayor Phil Goff.

The council is awaiting a High Court ruling on the legality of a two-year-old additional rate, which raises $14 million annually from accommodation providers.

Papers obtained by Stuff also show the council tried to persuade a parliamentary select committee to delay hearing a petition opposing the additional rate.

Goff unveiled within weeks of election in 2016, plans for what became known as the 'accommodation providers targeted rate,' or APTR.

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Goff campaigned on seeking new sources of revenue for the council, beyond general property rates, and originally proposed shifting onto the hotel sector the $28 million cost of promoting the city and staging events.

He eventually halved the amount when it came before the council, and it was voted into his first budget from July 2017.

The accommodation sector pushed back, arguing that it received only 10 per cent of the benefit from the visitor industry, and that imposing all of the costs in the form of an additional property rate, was unlawful.

The council extended the rate in 2018, to include online providers through websites like Airbnb, and this year spent four days in the High Court defending a judicial review sought by key hotel sector players.

At the same time as the High Court judicial review was underway, parliament's Governance and Administration select committee considered a petition from Ed Coutts who runs an accommodation-letting website on Waiheke Island, seeking an exemption for Island properties.

In March, the council tried in a letter to delay the select committee's work.

'We consider that the most appropriate and safest course would be for the committee to decline to hear the petition on the basis that the petition is not in order as legal remedies have not been exhausted,' wrote the council.

It repeated the view in a letter in June to the committee, but offered to provide, and later did, written evidence that avoided issues being considered by the High Court.

The select committee has yet to release its report on Coutts' petition.  

Auckland Council has previously refused to release copies of the legal advice which it considered before introducing the APTR.

'Council staff, with whom the Mayoral office staff were working, sought legal advice on the proposed targeted rate in November 2016. Since then, discussions with legal officers have continued regularly,' it wrote in response to an official information request. 

The extension of the rate to online providers, has been applied to only 1286 properties, and only 152 have been found which are rented out for more than six months each year.

The APTR has just rolled into its third year, and a decision from the High Court on its legality, may come before Christmas.

Auckland Council declined to comment while the case was ongoing.